The Motherhood Wage Penalty and Female Entrepreneurship
The study reveals that the motherhood penalty, characterised by reduced earnings opportunities in wage employment due to motherhood status, significantly drives female entrepreneurship, particularly among women facing wage discrimination, offering insights into women's career choices amidst workplace inequality.
The challenge:
The idea that working mothers leave their lucrative careers to gain more time with their families is a dominant narrative in the employment field, and women’s desire to resolve career-family conflict is often considered the main reason why they pursue entrepreneurship. This study explored an additional motivation driving female entrepreneurship: the motherhood penalty in the form of reduced earnings prospects that working mothers experience as a result of employer discrimination.
The study reveals that the motherhood penalty, characterised by reduced earnings opportunities in wage employment due to motherhood status, significantly drives female entrepreneurship, particularly among women facing wage discrimination, offering insights into women's career choices amidst workplace inequality.
The challenge:
The idea that working mothers leave their lucrative careers to gain more time with their families is a dominant narrative in the employment field, and women’s desire to resolve career-family conflict is often considered the main reason why they pursue entrepreneurship. This study explored an additional motivation driving female entrepreneurship: the motherhood penalty in the form of reduced earnings prospects that working mothers experience as a result of employer discrimination.
The research:
The idea that working mothers leave their lucrative careers to gain more time with their families is a dominant narrative in the employment field, and women’s desire to resolve career-family conflict is often considered the main reason why they pursue entrepreneurship. This study explored an additional motivation driving female entrepreneurship: the motherhood penalty in the form of reduced earnings prospects that working mothers experience as a result of employer discrimination.
The impact:
The study found that reduced earnings opportunities in wage employment due to motherhood status is a key factor driving female entrepreneurship. Moreover, the larger the “earning penalty” (wage discrimination) that mothers experienced in the workplace, the more likely they were to leave their employer and start their own business. The findings also found that this response by mothers to wage discrimination is more pronounced for women in high-paying or managerial positions, given the higher opportunity cost of staying in wage work and the higher potential payoffs from entrepreneurship. By shedding light on the drivers of female entrepreneurship, the study contributes to a more thorough understanding of what motivates women to pursue irregular and atypical careers, such as entrepreneurship and the workplace wage discrimination impelling their choices.
